By: Lt. Col. Shane Ostrom, USAF (Ret), CFP®
When a person dies, what kind of mess is left behind for survivors and beneficiaries?
I’m not talking about a garage full of collectibles or leftover tools and home improvement supplies. I’m talking about financial situations.
Think ahead: Pull out statements on all your financial accounts or write down a list of all your financial positions. Think in terms of all the places you pay someone or they pay you: Savings, investment, and retirement accounts. All the insurances. Loans. Credit cards. Mortgages. Properties. Precious metal holdings. Online accounts with automatic payments – Netflix, Amazon, streaming TV apps, banks, investment firms – or with automatic renewal programs that charge a credit card or bank account, such as regular donations.
If you have a hard time remembering or managing all the dealings, put yourself in the shoes of the person inheriting the mess. They are not involved with it on a daily, weekly, or monthly basis. They are clueless and overwhelmed during a vulnerable time.
Take time to simplify your financial life. Consolidate similar accounts. Get rid of programs you don’t use regularly. Make a list of user names and passwords; without that list, survivors are locked out of managing the online accounts.
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Establish beneficiaries for your accounts. Some financial products, such as retirement accounts and insurances, have beneficiaries; others, like bank and investment accounts, can have beneficiaries designated.
The bottom line: Don’t assume what’s second nature to you will be easy for a survivor.